Typically, board meetings are held monthly or quarterly. Board reporting invariably includes scorecards with ESG components. The scorecards include a mix of industry-based standards, which are fairly well developed in the OECD markets in which we operate, and internally generated standards or KPIs, which may be applied to the management team by investors. These standards and scorecards are tracked by management and monitored by the board (and the independent bodies or certifying associations, as relevant). We aim for all of our portfolio companies to be industry leaders and to implement best practice standards and procedures into their operations.
Ongoing management of ESG issues, as with all risks and opportunities that go to value, are considered by our investment team on an ongoing basis. Where changes are required, this can involve action plans for exploiting an opportunity, remedial work to mitigate a risk, or ultimately a divestment if exit is considered the most valuable option.
In a recent example, in 2016 Adelaide Airport commissioned the largest airport rooftop solar power system in Australia, further enhancing its reputation as a leader in environmental sustainability. The 1.17MW system, built on the short term car park roof by Solgen Energy, has reduced Adelaide Airport Ltd’s energy consumption and carbon emissions by close to 10 per cent. It is the largest private-sector solar system in South Australia and more than 10 times larger than the airport’s existing system, bringing the total rooftop solar capacity to 1.28MW. The solar system, made up of 4,500 panels, is large enough to power the equivalent of more than 300 homes. This solar system significantly reduces Adelaide Airport’s energy consumption while assisting the State Government in achieving its renewable energy targets.
In another example, one of our electricity distribution network operator played a vital role in responding to a major storm event in the UK. In this storm event, a month’s worth of rain fell in 24 hours and 68,000 properties were effected. In its response to the event, the business: deployed 75 generators to support 23,000 homes (the most mobile generation ever connected in the UK); made 4,500 proactive call to vulnerable customers; provided ongoing information updates via social and traditional media channels; provided 22,000 free meals to customers; and handled over 26,000 incoming phone calls.
Other examples in this area include leading the industry in integrated annual reporting, most notably at one of water utilities in the UK. This business also actively monitors and reports on its progress towards the goal of being a zero waste company and played a leading role in the development and promotion in the infrastructure industry of a new Publicly Available Specification (PAS 2080) for Carbon Management in Infrastructure.
A recently acquired company that provides district heating is already leader in the utilisation of renewable energy utilisation in the sector, as it provides more than 50% of its energy generated from renewable sources. In line with state government policy target is to increase this further over the next decade. To achieve this, in the context of the build-out of new district heating solutions, as a standard approach the company answers to the RfP always with an alternative option that increases the utilisation of renewable energy as compared to the base case.
Our ferry business in Europe operates 5 vessels on a high frequency crossing between Sweden and Denmark and the reporting and improvement for emissions forms part of managements KPIs. While the vessels were the first ones to comply with European emission regulations years before these were implemented, the company is currently going further and converting two of its largest vessels to battery powered operation. This is the first electrification project of this scale globally. As a result the company will reduce total emissions by more than 50% and save 18,000 tons of CO2 per year.